The DAO, the largest crowdfunding project, was rumored to be attacked, and the price of digital currency fluctuated violently

Reporter: Pencil lead

Just over four hours ago, there were rumors that The DAO, the world's largest crowdfunding project based on blockchain technology, was attacked, causing the price of DAO to plummet, and the price of Ethereum's digital token Ether also fluctuated violently.

According to Ethereum founder Vitalik’s blog post titled “Emergency Update: About DAO Vulnerability” (https://blog.ethereum.org/2016/06/17/critical-update-re-dao-vulnerability/) not long ago:

The DAO is currently under attack, and the attacker is gradually transferring the ether held by The DAO to a child DAO. The attacker is exploiting a recursive call vulnerability, triggering a split during the execution of The DAO's split method, and withdrawing multiple ethers in one transaction.

As a result of this attack, the trading price of DAO on Poloniex fell rapidly, from 0.000245 BTC (about 1.2005 yuan) to 0.000071 BTC (about 0.3479 yuan), and rebounded to 0.000208 BTC (about 1.0192 yuan) before press time.

Perhaps the market was worried that the stolen ETH would be sold in large quantities, so the price of ETH fell from 0.0276 BTC (about 135.24 yuan) to 0.0172 BTC (about 84.28 yuan), but then rebounded to 0.0238 BTC (about 119.07 yuan).

Due to the sharp price fluctuations in a short period of time, a large number of rumors have appeared in the market. Some rumors deliberately misled investors, mistakenly shifted the problem of the DAO code to Ethereum itself, and misled others to believe that Ethereum itself had a huge problem. In addition, some people deliberately forged screenshots and spread rumors to deceive users who are not familiar with the technology, claiming that Ethereum used a program backdoor to directly suspend all blockchain operations.

From all the current test data, the Ethereum blockchain has not been suspended, and all systems are operating normally. Therefore, after many rumors were refuted, the market began to gradually return to rationality.

Vitalik also clearly stated in the information released:

This vulnerability only affected The DAO, Ethereum itself is completely secure.

The developer community is proposing a soft fork. There will be no rollbacks, no transactions or blocks will be revoked. The soft fork will invalidate any transactions related to The DAO and child DAO starting at block height 1760000, preventing the attacker from withdrawing the stolen ether after 27 days. There will be a hard fork after this to recover the ether.

Miners and mining pools should process transactions as usual and wait for the soft fork update. If they agree to the soft fork, they should upgrade as soon as possible after the code is released. Holders of The DAO tokens and holders of ether should remain calm. Exchanges can trade ether as usual.

According to the latest news, all stolen Ethereum has been marked and confirmed and has not flowed into the market.

In fact, this is not the first time that such a situation has occurred in the digital currency. As early as the first half of 2013, Mt.GOX, a Bitcoin exchange that accounted for nearly 70% of global trading volume, declared bankruptcy almost overnight, and all the Bitcoins disappeared, which once caused widespread and far-reaching panic, and the price once plummeted from US$266 to US$105. However, looking back now, the pace of digital currency and blockchain technology has not stopped.

Digital currency and blockchain technology have experienced countless thefts and attacks. Exchange closures and runaways are also common. In fact, these incidents will make more people pay attention to the security issues related to digital currency exchanges.

The problems caused this time may also allow more people to re-examine the problems brought about by smart contract security and further strengthen the security maintenance of blockchain and smart contracts in the future.